7 investment mistakes to avoid in Singapore in 2019

The new year is here, and so are countless investment opportunities. Singapore is a blessed country when it comes to investment and finance management options. Singapore Government Bonds, shares, bonds, insurances, saving plans, Singapore Savings Bonds (SSB), fixed deposits, and property are just a few to name.

Being overwhelmed, making mistakes, and getting confused while investing or after you have invested is very likely to happen. We are pointing some most common mistakes that investors make, and also secrets that will let you save a lot of your dollars.

Mistake #1: Investing Without Saving

Practically, you are supposed to invest your extra cash after calculating your expenses and saving for the near future. In case, you are cutting down on these two things and planning your investment directly, sadly, you are going in the wrong direction. You never know when an unplanned or emergency expense may come up. In addition, if such an emergency does pop up, you will face an immense capital loss and a tough time if you don’t have some savings available. You will either have to take a loan or break your investment. In either case, you will be at loss. Therefore, don’t make this mistake, plan your finances well, put aside an emergency savings fund, and only then think about investment.

Mistake #2: Being a Short-term Investor

In this world where everything moves at a lightning fast speed, keeping your calm can be a little difficult. However, being patient is something that we strongly recommend. Keep in mind that most investments, irrespective of their nature, require a set duration to give you some profits. In the case of buying and selling shares, you still need to wait for a day or two to sell your shares to withdraw as cash from your brokerage account. Other instruments such as Singapore Savings Bonds (SBBs) can only be withdrawn annually when the interest of that year accumulates. In case, you keep withdrawing your funds or expect your investment to pay off before the set duration, you will only end up facing big time losses.

Mistake #3: Opting For the Cheaper Alternative

Whether you are planning to buy a stock, bond, insurance, or property, you will surely have multiple options providing attractive-looking deals. Several companies and brands are in the market to make business. Comparing all the options available is a good (and a compulsory) idea. But opting for the cheaper alternative may not always be the wisest or most economical decision in the long run.

Suppose Company A’s stock is selling at S$10 per share, while Company B’s stock is selling at S$1 per share. Company B may look more attractive to initial investors but it may not be the best pick. Some investment options may seem cheaper in the start but may burn a hole in your pocket in the long run. Thus, study every option that is available to you, understand the offerings, terms, and return options well before you hand over the check.

Mistake #4: Investing in Just One Place

We don’t deny that a particular type of investment can help you yield significant profits. But it’s always better to sail safely rather than regretting later. The company you choose to invest in may shut down or may change their investment terms. You absolutely don’t know what the future holds for you. Thus, have a solid allocation plan and have a good night’s sleep. Invest in different types of investment options available in your city. In fact, you can invest some of your capital in insurance, buy bonds, and enroll for SBBs. Think through or seek assistance from your financial advisor and diversify your capital investments.

Mistake #5: Make a Rush

Why do you want to go through mental pressure and rush into a decision? Do you have a flight to catch tomorrow? And even if you do, you should still spend some time understanding different investment types, options available, their terms, and everything else. Let’s take property investment, for example. Properties in Singapore have a lifespan of 99 years, except the older properties. In fact, you can’t afford to rush and elevate the chances of making a wrong choice. You need to explore several options before finding that one, perfect property. Likewise, spend time exploring options for other investment types rather than making a decision hurriedly.

Mistake #6: Relying on Others’ Words

By others, we mean all your relatives and friends who hardly have any in-depth or professional information and insight about investments. Only ask the professionals, like your financial advisor, for investment-related advice. Everybody else is just going to share their limited knowledge with you. This knowledge may not even be 100% true. The knowledge may only come from personal experiences and sources. As a result, the knowledge they share may be half-true or biased. Thus, avoid taking your decisions based on the information and assistance you get from your acquaintances.

Mistake #7: Getting Obsessed

Don’t be too conscious about your investments, and don’t pay too much attention to them after you have made them. In case, you get obsessed with your investments, you’ll only stress yourself and lose the peace in your life. You may feel far greater pain from losses than the pleasure from gains of equal magnitude if you keep monitoring your investments closely. Thus, trust your financial advisor for suggesting the investment to you, and trust the company you opted to invest with.

Now that you know all the common mistakes that you would have made, you can easily avert them in 2019. This way, you can have an investment- Now that you know all the common mistakes that you would have made, you can easily avert them in 2019. This way, you can have an investment-friendly and worry-free year ahead.

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